News: Airlines scrap carbon offset plans in protest over Brown's tax hike
Flights > News > # 1111 (12/12/2006)
News that Air Passenger Duty will double in February has scuppered plans for a major scheme which could have seen airlines ploughing money into green projects.
A number of UK airlines had been in talks with the Department of Environment, Food and Rural Affairs (Defra) over the possible introduction of a voluntary code under which companies will offset their carbon emissions by investing in clean energy ventures such as wind farms. British Airways, Virgin Atlantic and Easyjet have now pulled out of discussions in protest at chancellor Gordon Brown’s decision to double Air Passenger Duty to £10 on short-haul flights and £40 on long-haul flights in his pre-Budget report last week.
The airlines say they cannot be expected to pay this tax as well as the cost of Defra's scheme. An Easyjet spokesman said: “We were looking to join up with Defra on this. But we are disappointed with the mixed signals we have had from the Government over the last few days.”
A Virgin Atlantic spokesman said: “We question the validity of such a scheme in the current atmosphere of higher taxation and the need to find technological solutions to reduce emissions.”
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On the surface, it is hardly surprising that the airlines have been queuing up to condemn Gordon Brown's latest taxation plan, just as you wouldn't expect turkey farmers to start campaigning for the abolition of Christmas. Although they have slightly different ways of expressing it, companies like Easyjet, Flybe and Ryanair all seem to adopt the attitude that they are not the bad guys, because they use ultra-efficient fleets, and only operate point-to-point flights, eliminating the need for heavily wasteful connections through congested airports. This might be a valid argument, but gains in efficiency will only have a limited value if these technological improvements are outstripped by incessant growth in passenger numbers.
However, this does not belittle the fact that the UK aviation industry has been very proactive in trying to negotiate carbon trading schemes, and, more importantly, there are some very real inconsistencies with trying to label such a crude tax as being blessed with any serious environmental credentials. Easyjet quite rightly point out that a blanket tax on all flight tickets provides no incentive to any airline to increase efficiency, a policy which is entirely inconsistent with the way different vehicles and fuel types are taxed according to their emissions. Opinion polls seem to demonstrate that most people accept the polluter pays principle, and that airlines should be making a reasonable contribution to offset the environmental damage which they cause. Yet, the emissions trading schemes which airlines were negotiating with Defra were proposing to do just this. Considering that these negotiations appear to have been at a very advanced stage, and that the EU has also put forward a raft of emissions trading proposals, it is perfectly understandable that the airlines are unhappy that the taxes their passengers will have to pay are doubling overnight. They quite rightly feel that they have been stabbed in the back. This latest move stinks of a quick appeasement measure to get the green brigade off the chancellor’s back at a time when all sides need to sit down and debate genuinely fair and sustainable solutions.
Concerns over global warming are nothing new - they were around long before air passenger duty was first introduced by Kenneth Clarke in the mid-1990’s, and they hadn't gone away when Gordon Brown halved air passenger duty back in 2000. Environmentalists might point out that new reports are coming out all the time about the increasing dangers of global warming, but how many of these are based on rehashing previously known data, and repackaging it to satisfy the current climate of fear? The government knows this, and they’ve used the Stern report to conveniently justify additional taxes which will not do anything to combat global warming.
In fact, it is not just airlines which have good reason to be angry at the latest changes. There has been growing awareness amongst the general public about carbon offset schemes, which give people the opportunity to make their own voluntary payments in order to counterbalance the environmental damage they cause through activities such as flying. Any voluntary measure is never going to get the same take up as a compulsory charge, but a number of airlines were already talking about experimenting with "opt-out", rather than "opt-in" carbon offset options, which would mean that passengers had to make such a payment, unless they deliberately selected not to do so. Now that passenger duty has doubled, will people feel the same obligation to make these payments? The cost of carbon offset is a very debatable figure, but according to the government's own guidelines, it is still just a fraction of the amount charged by air passenger duty, at either the new or the previous levels.
Whatever one's opinions of global warming, small amounts of money can still go a long way towards mitigating environmental damage, especially on projects such as rainforest conservation, where as little as £25 can preserve an acre of trees.
The simple reality which the airlines have exposed is that these increases in air passenger duty could actually end up doing more environmental harm than good. Whilst it might be true that any increase in costs will deter some passengers, this demand management may itself be offset by airlines becoming less efficient. This move isn’t just about swelling government coffers, it is also about taking control away from individual passengers and the corporate actions of airlines, and diverting money which might well have been spent on many worthwhile projects into the myriad channels of government waste.
Perhaps the most interesting point has come from charter airline First Choice, which is more concerned about the additional £40 increase which will be levied on long-haul premium service flights. Long-haul flights should not become the exclusive preserve of globe trotting prime ministers and chancellors. Assuming that this ever swelling nanny state does still accept that we all need holidays from time to time, then what is wrong with wanting a little extra comfort on a longer flight? Granted, larger seats take up more space, but if we let certain environmentalists have their way and abolish premium class, what would be the point in taking a holiday, and then returning home in a sardine can which packs passengers in so tight that they need another holiday to recover? This might sound flippant, but to anyone who is over 6ft, is it really that unreasonable to suggest that any increase in passenger duty on extra-legroom seats could be discrimination on the grounds of height?
One notable absentee from this debate, at least in the last few days, has been Ryanair’s firebrand chief executive Michael O’Leary, who can usually generate enough hot air to keep several power stations running. Mr O’Leary’s deafening silence on this issue suggests there is something brewing at Ryanair Towers. The Irish no-frills giant have axed routes in protest at tax increases in the past, but we have a sneaky feeling that its response the Air Passenger Duty hike will be quite the opposite. We wouldn’t be surprised to see Ryanair stick two fingers up at Mr Brown’s ill-judged attempt to stifle demand for flying by announcing a raft of new routes from the UK and launching its biggest ever seat sale. Ten million free flights anyone (not including taxes and charges of course)? Don’t bet against it!
